For the second quarter, including charges of $288 million, the company reported a loss from continuing operations of $313 million, or $4.76 per share, compared with a loss of $15 million, or 23 cents per share, for the same period last year. Sales were down 20% to $119 million from $150 million for the same time last year.

Up until now, company officials, as well as analysts and investors, had blamed Ha-Lo's problems on its disastrous $240 million acquisition of Starbelly, an online promotional products company. In May, a year after the acquisition, Ha-Lo officials wrote off the deal, essentially acknowledging the property was worthless.

About $200 million of the second-quarter charge is related to Starbelly. Another source of financial woes, observers and company officials said, were expenses related to the 15-year, $128-million lease on Ha-Lo's elaborate, Helmut Jahn-designed headquarters in Niles.

But Alexander Paris, an analyst with Chicago-based Barrington Research Associates, said the latest earnings report shows Ha-Lo has also suffered from a slowdown in its core business of selling mugs, T-shirts and other items emblazoned with corporate logos.

"The root of concern for many has been Starbelly and the headquarters lease, but it looks like the core products business is not doing well, judging by these numbers," said Mr. Paris, who stopped covering Ha-Lo about two weeks ago, when its share price dropped below $5. The stock was delisted following the bankruptcy filing July 30.

But in a conference call with investors Tuesday, CEO Marc Simon stressed that the company has received debtor-in-possession financing of $30 million and has pared its debt to about $8 million, from $74 million in the first quarter. The company also said it has about $54 million in receivable accounts, which will allow it to continue paying its vendors.

Of the bankruptcy filing, Mr. Simon said, "Within the appointed 120-day period, we intend to emerge. We have a lot of challenges, but all of our energy is aimed at preserving and enhancing the business."

The company also has laid off about 325 employees in the past five months, a move that helped cut costs, but likely also had a negative effect on the business, Mr. Paris said.

"Sometimes you've got to lay people off for the overall health of the business... and sometimes that contributes to the decline," Mr. Paris said. "The healthy contributors start to get worried, they're not focused on work, and you're impacted. The key for them is to get to the right size without falling apart."

Ha-Lo's most publicized problems recently have involved Starbelly and its original owners and key shareholders. They argue that Ha-Lo's recent Chapter 11 filing is a maneuver by the company to skirt an obligation to pay them the $46 million conversion price of preferred stock they received in the acquisition. (Crain's, Aug. 6).

Shares of Ha-Lo were trading at about 2 cents per share on a Nasdaq bulletin board Tuesday afternoon.